Question

question 14 (3 points)
you can invest $6,000 in a certificate of deposit (cd) with a guaranteed return of 2% or $6,000 in a tech startup with a 40% chance of quadrupling your investment and a 60% chance of losing it all. what is the expected value of the tech startup investment?
expected value = (probability × earnings) - (p
$1,600
$0
$3600
-$4,800
question 15 (3 points)
a company has the option to invest in a new project that could potentially bring in $1 million in revenue but also carries a 50% chance of failure, or continue with its current projects that are expected to bring in $500,000 with a very low risk of failure. which strategy is safer and which has a higher expected value?
continuing with the current projects is safer due to potential of $1 million in revenue. the new project has a higher expected value with the $1.5 million in revenue.
the new project is safer due to the low risk of failure. continuing the with current projects has a higher expected value due to the potential $1 million in revenue, but it also carries a higher risk.
continuing with the current projects is safer due to the low risk of failure. the new project has a higher expected value due to the potential $1 million in revenue, but it also carries a higher risk.

Explanation:

Answer:

(Question 14) C. $3600
(Question 15) C. Continuing with the current projects is safer due to the low risk of failure. The new project has a higher expected value due to the potential $1 million in revenue, but it also carries a higher risk.